Case Study Page - Tourism in Iceland
This is a revision page on tourism in Iceland. It covers the growth of tourism and the reasons for the growth. The advantages and disadvantages of this growth and the ways Iceland is attempting to manage the challenges of tourism.
Case Study: An area where tourism is important
Describe and explain the growth of tourism in relation to the main attractions of the physical and human landscape.
Evaluate the benefits and disadvantages of tourism to receiving areas
Demonstrate an understanding that careful management of tourism is required in order for it to be sustainable
Iceland is a country that has experienced rapid growth in tourism over the last few decades. Tourism grew from 560,000 a year in 2008 to nearly 2.5 million in 2018. In 2023, tourism was 2.2 million.
The top three origins of visitors come from the United States (23%), the United Kingdom (13%), and Germany (6.7%). Together, these three markets account for just over 43% of total tourist arrivals.
This growth has been caused by a number of factors. These are:
- A government strategy to grow tourism for economic growth
- The development of the country as a stop-over destination between the USA and Europe
- The development of the Golden Circle Route creates a perfect sightseeing tour for short-stay visits
- Strong investment in the education of expert local guides
- Its sensational natural beauty in terms of volcanic and glacial environments as well as the Northern Lights.
- An all-year-round tourist season
People are attracted to Iceland for its unique physical geography. The country boasts both glaciers and active volcanoes as well as stunning volcanic scenery including lava flows, geothermal sites, basalt formations, unique moss beds, stunning waterfalls, coastlines and fjords. The urban environment is also unique, presenting a vibrant nightlife, unique cultural experiences, luxury hotels, spars and geothermal pools as well as ports open to cruise ships.
Advantages
Tourism is a major export for Iceland. In 2018 it amounted to $4 billion nearly 40% of its exports.
It contributed nearly 9% of GDP creating 30,000 people, over 15% of its working population.
Tourist creates many indirect jobs such as in farming and fishing.
The Golden Circle Tour provides short-stay visitors with an easy-to-access tour of three wonderful sites that include, Þingvellir (Thingvellir) National Park, the Geysir Geothermal Area, and the Gullfoss waterfall. This has helped grow Iceland as a stop-over destination.
Iceland has the opportunity to export its culture to visitors
Tourism creates a multiplier effect from the wealth creation and spending in the economy
Disadvantages
Tourism jobs are not evenly distributed. The South and Reykjavik. Many regions, especially the north see very little of the tourism income. 50% of all hotel stays are located in Reykjavik.
The South attracts many young people away from the North in search of work. This leads to the loss of traditional livelihoods as well as an ageing population.
The Golden Circle has created overcrowding at these sites deteriorating the visitor experience with traffic and congestion. The sites have also been badly affected by footpath erosion and bad behaviour.
In some cases, moss has been over-trampled or vandalised. Illegal camping damages nature and people ignore the safety of searching for the perfect selfie.
Although, it is improving there is a lack of infrastructure at these sites.
Loss of local services and housing. Increasing costs as services are aimed at tourists. This is leading to rapid urban change that upsets locals.
Locals are also upset with the overcrowding of the city, especially when cruise ships arrive flooding the small city centre with people.
Cruise ships also create poor air quality in the city
The key challenge for Iceland is to maximise the gains from tourism while at the same time protecting the environment upon which tourism depends.
Iceland has adopted a Sustainable Development Plan. This has four main aims:
- Profitability above tourism numbers - this means Iceland is likely to increase costs to tourists and reduce the number of tourists visiting
- Benefits for all regions - this means widening the distribution of tourists in Iceland and reducing the dominance of the South
- Unique experience, quality and professionalism - this ensures that the tourism experience is of the highest quality and supports the policy to increase costs and reduce numbers
- A balance between conservation and tourism activity - there has to be this balance the number of tourists visiting sites and the protection of the natural beauty of the site.
The Environmental Assessment Tool
This was launched in 2019 and measures the environmental condition of sites. This is important because the data provides the tourist board with the information needed to control tourism numbers at sites and to make decisions on protective infrastructure such as walkboards.
Managing Sensitive Sites
Infrastructure at tourist sites is improved through the strategic National Infrastructure Plan, featuring 3-year rolling investment plans, and the Tourist Site Protection Fund. Its annual budget in 2017 was $4.5 million
To manage footpath erosion, the authorities build raised footpaths, decking boards and viewing points. These much-needed interventions facilitate even more visitors and some argue ruin the view, although generally most infrastructure is sympathetic to its environment.
In some cases, sites can be temporarily closed. In 2018 the geothermal river in Reykjadur Valley was closed due to excessive footpath erosion.
Reducing Overcrowding at Sites and in the South
A new long-term Tourism Policy Framework 2020-30 places an emphasis on reducing overcrowding and pressure on the environment tourists. To do this tourists need to visit more places. The Golden Circle tour is a victim of its own success.
The Visit Iceland website enables visitors to plan their trip, based on sustainable tourism. The site encourages visitors to go to the regions rather than stay just in the Reykjavik area.
It provides three additional tours for tourists including other suggested sites. These are called:
- The Arctic Coast Way - the Northern region
- The Westfjords Way - the Western region
- The Diamond Circle - the Northeast region
Improving Air Quality in Reykjavik
In 2019 Iceland adopted one of the strictest laws for controlling air quality in its shores. They require that fuel used by ships sailing within 12 nautical miles of its coast contain no more than 0.1% sulfur, a reduction from the current international limit of 3.5%.
Improving Visitor Behaviour
The Iceland Tourism Board produces fun and informative media campaigns to educate tourists on how to visit sensitive sites with respect. It educated the tourist on how to avoid moss beds, where to camp and where not to camp as well as educating visitors on a 'leave no trace' approach.